Impactful Budget 2026 Tax & Personal Finance Changes

✅ 1. Share Buyback Taxation – Relief for Retail Investors

Earlier, profits from share buybacks were taxed at the investor’s income tax slab rate, going as high as 30%. This made buybacks an expensive exit option for individual shareholders.

Budget 2026 changes this by taxing buybacks as capital gains, with a concessional rate of around 12.5% for individuals.

❌ 2. Sovereign Gold Bonds (SGBs): Secondary Market Tax Changes

Earlier, capital gains on SGBs were tax-free on redemption, even if the bonds were purchased from the secondary market.

Now:

• Only SGBs bought directly from RBI and held till maturity remain tax-free

SGBs bought from the secondary market, or sold before maturity, will attract capital gains tax

✅ 3. TCS on Foreign Education & Medical Expenses Reduced

Under the Liberalised Remittance Scheme (LRS), Budget 2026 reduced Tax Collected at Source (TCS) on essential overseas expenses:

• Education abroad: 5% → 2%

Medical treatment abroad: 5% → 2%

✅ 4. Streamlined 15G / 15H Submission Process

Earlier, individuals eligible to avoid TDS had to submit Form 15G or 15H separately to every bank, mutual fund, or institution.

Budget 2026 simplifies this process:

• Submit 15G / 15H once
• NSDL/CDSL will automatically circulate it across institutions

Who benefits?

• Resident individuals with low or nil taxable income
• Senior citizens earning interest from FDs, bonds, or post office schemes

Retirees, homemakers, and low-income investors

❌ 5. Higher Securities Transaction Tax (STT)

Budget 2026 increases STT on futures and options, raising transaction costs for derivative-based strategies.

Revised STT Rates (effective 1 April 2026)

• Futures: 0.02% → 0.05% of traded price
• Options (premium): 0.10% → 0.15%

Options (exercise): 0.125% → 0.15%

✅ 6. Customs Duty on Personal Imports Reduced

Customs duty on goods imported for personal use has been reduced:

• From 20% → 10%

📅 7. New Income Tax Act from 1 April 2026

A new Income Tax Act will replace the existing legislation

🏠 8. PAN-Based TDS System for NRI Property Sales

From 1 October 2026:

• Buyers no longer need a TAN to deduct TDS when purchasing property from an NRI
• TDS will be deposited using the buyer’s PAN

🧾 9. Motor Accident Compensation Made Tax-Free

Compensation received under motor accident claims will now be fully exempt from income tax.

🌐 10. Foreign Asset Disclosure & Crypto Penalty Rationalisation

Budget 2026:

• Introduces clearer foreign asset disclosure norms

Rationalises penalties related to cryptocurrency reporting

📌 Keep watching this space as the new Income Tax Act rolls out post 1 April 2026 and as compliance rules around digital and foreign assets continue to evolve.

Date: February 2, 2026